Energy bills 'may not see increases' as industry to raise up to €18bn for grid upgrades

HOUSEHOLD ENERGY BILLS may not see large increases as the sector seeks to raise funds for an up to €18bn revamp of Ireland’s energy grid, price comparison site Bonkers.ie has said.

The Commission for Regulation of Utilities (CRU) has published a proposed investment plan, seeking to upgrade Ireland’s energy grid between 2026 and 2030. It could cost between €14.1bn and almost €19bn, its proposal says.

This could add up to €16 per year to household bills, but Bonkers.ie’s communications manager Daragh Cassidy has suggested that substantial increases may not hit consumers’ bills if wholesale energy costs fall.

Wholesale energy prices increased massively following the Russian invasion of Ukraine. This resulted in many household energy bills getting more expensive in recent years.

According to Cassidy, wholesale costs for Irish providers are up to 80% higher than they were before the war. As the market stabilises, there’s a possibility that substantial decreases in supplier prices may “cancel out” the need to increase consumer bills.

“So we may not necessarily see a rise in consumers’ bills,” he said. 

Upgrading the Irish energy grid was debated following Storm Éowyn earlier this year, where substantial power outages continued in parts of the country for almost a month after the passing of the storm.

Long-standing issues with the grid are now causing bottlenecks, such as supply shortages and resilience issues. This, according to Cassidy, is now impacting the delivery of housing and the state’s ability to meet climate targets.

Cassidy said: “While the potential €6 to €16 a year increase in households’ electricity bills may not be welcomed by consumers, it’s moderate in the overall scheme of things.”

A €16 annual increase may be a “price worth paying” in that context.

However, it is up to individual providers to decide how they pass increases in network or grid fees onto consumers. Cassidy said companies can choose to absorb the costs or increase bills.

A public and industry consultant phase on the proposed upgrades will now begin, with the CRU set to make a final decision later this year. The energy regulator encourages customers to shop around and switch suppliers regularly to get the best deals.

The Irish Independent reported of confusion among providers over the extent of the possible increases to bills. Providers, according to the newspaper, say fee hikes will need to be much higher than €16 per year to raise the funds needed for the upgrades.